Michael Napier

08 Dom Regan NewsIf the costs do not exceed £25,000 then onegets off lightly and need only complete the firstpage of the precedent. Somewhere out there isa man who should be elevated to the status ofsaint for suggesting this to Sir Rupert’procedures four years ago in a mannercompatible with the thrust of theimminent, general Jackson reformswith tighter controls on the length ofspeeches and documents, for example,intended to curb excesses and makejustice achievable at proportionate cost.The purpose of costs managementis to enable the court to manageboth the steps to be taken and thecosts to be incurred by the parties soas to further the overriding objective.The prompt - proportionate disposalof dispute - is what underpins Part 1,the most important segment of theentire CPR.Unless the court orders otherwise,all parties (except self-representedlitigants) must both file and exchangebudgets within 28 days after serviceof any defence. Whilst the court candirect that budgets need not beserved in a particular matter I considerthat few such exceptions will be made.I was fortunate enough to be presentat the publication of the final Jacksonreport and what struck me then andstays with me was the passionatesupport for it voiced by the LordChief Justice and the then Master ofthe Rolls who has now, rightly, beenappointed to head the Supreme Court.The judicial muscle backing RupertJackson is formidable.Precedent H is the normal form tocomplete. If the costs do not exceed£25,000 then one gets off lightly andneed only complete the first page ofthe precedent. Somewhere out there isa man who should be elevated to thestatus of Saint for suggesting this toSir Rupert (although I would be happywith a large cheque).If the estimate exceeds £25,000then the full form must be completed.In essence, the form seeks two criticalpieces of information. One is requiredto identify the team that will workon the matter with relevant chargingrates specified. The second elementis a breakdown of the work to beperformed, be it on disclosure, witnessstatements or whatever. Thus, one cansee the proposed expenditure intendedfor each and every aspect of the claim.Since they could not quite affordLord Sumption at £8,000,000,Lord Neuberger MR and Sir Rupertkindly asked me (£0) to monitorthe Birmingham Mercantile Courtcosts pilot scheme ,run by HisHonour Judge Simon Brown QC. Thisembittered cynic was captivated bythe effectiveness of the process andreported accordingly. Having heardone barrister sneer at the very idea ofbudgeting – ‘who knows what it willcost?’ - I was smitten by the simplicityand efficacy of the process.The Judge was charming yet surgicalin his approach: “Case managementis costs management and vice–versa,”was what he said to me as we enteredcourt for the first time. It was chilling tosee how some lawyers had not thoughtthings through.An inheritance claim worth£250,000 generated costs estimatesof like amount. “You do realise, don’tyou, that if this goes to trial there willbe nothing left?” asked the Judge.The advocates nodded yes but theirfaces contradicted the body language.That grenade triggered mediation andan early settlement. As an aside - thebenefit of an informed outsider - theJudge stepping back and taking apragmatic view was incalculable.The typical hearing in Birminghamlasted about 45 minutes. This does notpermit an intricate preliminary detailedassessment to occur. Rather, the Judgewas on the alert for any element ofexpenditure which stood out as extremeor extravagant. He would compare andcontrast the respective spend and seekan explanation as to discrepancies.The aim of the court is to approvea budget, and the impact of thatis to be seen from the Henry andSecuritynet decision which I describedabove. If the court thinks the spendA fewpractical tipsAbove all else, talk to youropponent(s) before going nearthe estimate. You need to considerwhat the issues are, and then howbest they can be resolved. This willshape disclosure and evidence, layand expert. Electronic disclosureis growing in importance so reflectupon whether it might assist inthis dispute. If you are lookingto involve expensive expertsyou ought to consider seekingtenders. Let them pitch for andgive quotations. No one in theBirmingham court considered this,apart from the Judge.Getting a sound budget in placerequires collaboration between theperson running the matter and theircosts lawyer, internal or external. Iurge everyone to start thinking nowabout this new duty to budget.One must have in place systems topromptly identify when and wherea budget might be breached. It ispermissible to go back to courtand seek leave to revise a budget.That might have helped thehapless claimants in Henry.There are of course someindividuals with an anarchictendency, who might decidethat filling in the budget formis a tedious chore that mightbring on the vapours and so theywill ignore it. Bad news. Withinthe Ministry of Justice is an evilmastermind. A party which failsto file a budget when obligedto do so will be taken to haverelinquished all claims to costsapart from court fees payable. Ihave a subtle sixth sense whichtells me that an awful lot ofpractitioners will complete thepesky form. And it shall be verifiedby a statement of truth signed bya senior legal representative.Be afraid...improper it will decline to approve,which is the clearest warning sign of atroubled outcome and an aggressiveassessment if that party succeeds.Professor Dominic Reganwww.profdominicregan.blogspot.comML // November 2012